Energy suppliers Utility Point and People’s Energy have ceased trading, affecting around 570,000 domestic customers across Scotland and the rest of the UK.
Utility Point supplies gas and electricity to about 220,000 domestic customers and People’s Energy supplies about 350,000 domestic customers and 1,000 non-domestic customers.
The energy supply and credit balances of the two companies’ customers will be protected under Ofgem’s safety net. The energy regulator said affected customers will be contacted by their new supplier, which will be appointed soon, until then, they are advised not to switch to another supplier and have a meter reading ready for when their new supplier contacts them.
The development came after fellow suppliers PfP Energy and MoneyPlus Energy went bust a week ago.
Ofgem director of retail Neil Lawrence said: “Although the news that a supplier going out of business can be unsettling, Utility Point and People’s Energy customers do not need to worry.
“Under our safety net we’ll make sure your energy supplies continue. If you are a domestic customer with credit on your Utility Point or People’s Energy account this is protected and you will not lose the money that is owed to you.”
He added: “Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.”
Gillian Cooper, head of energy policy for Citizens Advice, said: “The failure of Utility Point and People’s Energy leaves more than half a million customers facing uncertainty. With the energy price hike and cut to Universal Credit due in the next fortnight, this comes at a hugely unsettling time for many.
“With more customers affected at one time than ever before, Ofgem must provide support and protection – especially for those worried about their finances.”
What should I do if I am affected?
If you’re a customer of a failed energy supplier, Ofgem will move you on to a different one. This can take a few weeks, but your gas and electricity supply will continue in the meantime.
Your new supplier will contact you and it’s good to be prepared beforehand, so take a note of meter readings and your account balance. It’s also worthwhile keeping old energy bills.
Citizens Advice also recommends waiting until your new supplier is appointed before cancelling any direct debits as that should make the transition easier.
What happens if I have a prepayment meter?
If you have a prepayment meter, your new supplier should tell you how you will get a replacement key or card and provide a new prepayment meter if necessary.
Affected customers with energy concerns can contact energyadvice.scot for free, impartial and practical advice by visiting www.energyadvice.scot, or calling 0808 196 8660 between 9am and 5pm, Monday to Friday.
Colin Mathieson, spokesperson for Advice Direct Scotland, said: “While this news can be worrying for consumers, it’s important to remember that you won’t be cut off if your energy supplier has gone out of business – so you don’t need to do anything right now.
“There won’t be a break in your supply when it’s transferred over, although the price you pay for your energy might go up – and that’s when you can consider switching supplier, and you won’t be charged an exit fee to do so.”
Get the latest money-saving and benefits news sent straight to your inbox. Sign up to our weekly Money newsletterhere.